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Trump's Ex-Campaign Chair Guilty on 8 Counts in Fraud Trial; Trump Praises Manafort for Refusing to Break Unlike Cohen; Cohen Implicates Trump in Illegal Hush Money Payments; Cohen Lawyer Says He has Information that would Interest Mueller; GOP Rep Hunter and Wife Indicted for Misuse of Campaign Funds. Aired 9-9:30a ET

Aired August 22, 2018 - 09:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


[09:00:03] POPPY HARLOW, CNN ANCHOR: All right. Good morning, everyone. I'm Poppy Harlow in New York. This morning two of the president's former right hand men are felons and the White House is ready to fight, unleashing a new strategy -- paint the president and his former fixer -- paint the president's former fixer as a liar.

That's the strategy of the White House this morning. And the president with this message moments ago, quote, "If anyone is looking for a good lawyer, I would strongly suggest that you don't retain the services of Michael Cohen."

OK. Michael Cohen pleaded guilty to eight felony counts and implicated the president in a hush money scheme. Cohen says then- candidate Trump directed the porn star and Playboy Playmate payoff to influence the election. This is just days before Americans went to the polls. And this morning Cohen's attorney says his client is ready to tell all to the special counsel.

(BEGIN VIDEO CLIP)

LANNY DAVIS, ATTORNEY FOR MICHAEL COHEN: It's my observation that Mr. Cohen has knowledge that would be of interest to the special counsel about the issue of whether Donald Trump ahead of time knew about the hacking of e-mails, which is a computer crime that was the subject of the indictment of the 12 Russians.

(END VIDEO CLIP)

HARLOW: An already ugly fight is about to get uglier.

Plus, the other felon in the president's inner circle handing Special Counsel Mueller a victory, a major victory. Ex-Trump campaign chief Paul Manafort convicted on eight counts, facing 80 years behind bars.

What this means for Mueller's team this morning and will Paul Manafort flip?

Let's begin with our reporter Kara Scannell on Michael Cohen.

You were fantastic yesterday. Amazing reporting all the way through. Let's push it forward and let's talk about where we go from here. KARA SCANNELL, CNN CORRESPONDENT: Well, Michael Cohen will be

sentenced on December 12th, that date is set. But I think between these four or so months in between we're hearing from Lanny Davis, one of his attorneys, that Cohen wants. He has information he wants to provide to Robert Mueller, the special counsel's team, and he's kind of dangling out little hints of what that might be, suggesting them -- that Trump knows about pre-hacking.

You know, we know that Mueller's team is investigating and asking questions of all of these associates of Roger Stone.

HARLOW: Right.

SCANNELL: You know, Roger Stone is one of the people that was referenced, although not by name, in that indictment of the 12 Russians.

HARLOW: Right.

SCANNELL: He was communicating with the campaign and it seems like Michael Cohen is trying to bridge that and say that he happens to know something about that. Roger Stone hasn't been accused of any wrongdoing, he's been, you know, on our air and others talking about this. So I think, you know, we're going to see Cohen trying to get in with Robert Mueller's team and we'll see if they get the best deal he can get.

HARLOW: Let me just ask you before we move on to the next thing. What was it like for you being in the courtroom yesterday? Because no one that's watching us, none of us saw Michael Cohen firsthand say I did all of these illegal things at the behest of the president but you did. You heard him. What was that moment like?

SCANNELL: Well, it was really stunning. I mean, Michael Cohen is -- you know, he's about to allocute, which is to describe to the judge, all the crimes that he committed and he asked the judge if he could stand to do it, and he had notes because he said he wanted to stay focused and so he went through his personal tax charges, he went through misstatements to the bank and then when we get to the campaign finance moment, you know, he says so clearly, in coordination and at the direction of the candidate for federal office, which we all knew was Donald Trump, and starts to list how he had worked with American Media, the publisher of the "National Enquirer."

HARLOW: Right.

SCANNELL: And their payment for Karen McDougal that he assisted and the payment to Stormy Daniels to silence both of their allegations of an affair just before the campaign. And he also said specifically that he did it for the principal purpose of influencing the election, you know, so clearly implicating the president there.

It was a silent courtroom. You know, he's just saying this in the words to sort of echoing.

HARLOW: Wow. SCANNELL: And it was really just a stunning moment to hear him very

directly. There was no waver in his voice. Just very forcefully standing up and stating that he did this at the direction of the president.

HARLOW: And that moment you get up and you run out the courtroom and bring the news to all of us.

Kara, thank you.

All right. Again we just heard from the president moments ago. He said don't hire Michael Cohen as your lawyer. That's swipe this morning. We'll see what else might be ahead.

Ryan Nobles joins me at the White House this morning. The White House has a plan, has a strategy, it is discredit Cohen, clearly the president is part of that strategy as he's doing this morning. What else?

RYAN NOBLES, CNN WASHINGTON CORRESPONDENT: Yes, Poppy. It probably doesn't come as too big of a surprise that this is the plan that the White House has to try and discredit Michael Cohen as a figure in all of this drama and suggests that he's just not a credible voice in all of this. And it began with the president's tweet this morning where he is telling people that if they're looking for a lawyer that they probably shouldn't retain the services of Michael Cohen, but we should point that things here were a little bit uneven yesterday.

Many members of the White House team seemed a bit stunned and shocked by the news. The president we're told in a dour mood as he traveled -- mood, I should say, as he traveled to West Virginia last night.

[09:05:04] And they took a step back and just decided that, you know, Michael Cohen, now a convicted felon, he's been accused of lying in the past and that the argument that they need to make to the American people is that he's someone who can't be trusted and therefore should not reflect poorly on the president.

And the other tactic they're going to take, Poppy, is to try and show that this isn't connected to Russia in any way, and that no one has yet to provide evidence that the president is guilty of collusion with Russia. And this all tracks back to a bigger point that the White House is attempting to make and that this isn't necessarily a legal problem for the president of the United States, it is a political one.

In the more that they can to try and distract from the Mueller investigation and continue to retain that support that people trust the president of the United States the less their chances are of the president facing impeachment.

Poppy, that all comes back to the midterms. That's what you saw the president doing last night. They want to make sure they hold on to as many Republican votes as possible in October because that could be the president's salvation -- Poppy.

HARLOW: The job must have -- may have gotten a lot harder for Republicans in Congress to do after the last 18 hours.

Ryan, thank you.

Joining me now CNN legal analyst Paul Callan and federal and white- collar criminal defense attorney Caroline Polisi.

So, all right, let me read you a line that struck me on the front page of the "Washington Post" this morning from Dan Balz's fascinating column. He writes, quote, "Everything that happened in a pair of courtrooms hundreds of miles apart strengthen the hand of Special Counsel Robert Mueller, and weaken that of the president of the United States."

Is there any disputing that that is correct this morning?

PAUL CALLAN, CNN LEGAL ANALYST: There's no disputing that it's correct, but the question is for how long does it strengthen the hand and how will this play out ultimately? And the thing I worry about in terms of people getting overly excited about the fact that if they're opposed to Mr. Trump that this will be his downfall is that legal cases against president of the United States and impeachment proceedings are extraordinarily different -- difficult to bring.

HARLOW: Right.

CALLAN: I'm not so sure that in the end, in a month from now, that this story will have staying power.

HARLOW: Really?

CALLAN: Yes.

HARLOW: Fascinating. I mean, Caroline, to Paul's point, how likely do you think it is that the Southern District of New York which prosecuted Michael Cohen on this doesn't try to challenge the assumption, the precedent. It's not law, a precedent, that a sitting president cannot be indicted.

CAROLINE POLISI, FEDERAL AND WHITE COLLAR CRIMINAL DEFENSE ATTORNEY: You're right. It's an Office of Legal Counsel memorandum, it's disputed among sort of legal scholars because obviously it's not in the Constitution. So I think a really interesting point that Preet Bharara made last night on ANDERSON COOPER" is that if you look at the criminal information, and an information, just a charging document that Michael Cohen pleaded to, it's essentially the same thing as an indictment.

The prosecutors just didn't have to go through getting a grand jury to sit. And the information doesn't actually have this language about the president. Michael Cohen, of course, in his allocution to his guilty plea stood up in federal court and stated that he did this, these campaign finance law violations --

HARLOW: At the behest of the --

POLISI: At the behest of the president. HARLOW: But you think it's notable that it's not included on paper?

POLISI: I do. I do think that's notable because --

HARLOW: Why wouldn't it?

POLISI: There's a lot of this buzzword unindicted co-conspirator. The president is not technically an unindicted co-conspirator in this information. He's not actually mentioned in the information so I think that was a -- you know, a real move on the part of the SDNY prosecutors not to sort of go one step deeper. It would have been different if they named him in the information.

HARLOW: What do you think -- it's a great point. Why do you think they didn't, Paul?

CALLAN: Well, it's an interesting set of charges against Cohen. The charge essentially is that the payment to Stormy Daniels and Karen McDougal were campaign contributions that were unreported and they were corporate campaign contributions.

HARLOW: Right.

CALLAN: Now the idea here is that Cohen clearly is guilty of this, he's admitted it but if the president was using Cohen to make the contribution it's an entirely different thing because the president has the right to contribute to his own campaign.

HARLOW: But he has to disclose it.

CALLAN: It's a very, very different -- he has to disclose it.

HARLOW: Right.

CALLAN: So the only thing that --

HARLOW: And we know it wasn't disclosed?

CALLAN: That's correct. So the only thing the president would be guilty of is a failure to report it whereas the theory against Cohen is a much more elaborate theory and a much more serious theory.

HARLOW: Can we talk about cooperation here? Because, you know, so many headlines this morning and last night were oh, and Cohen isn't even cooperating. That's not totally the case. There is a bargain in this plea that essentially says that in return for pleading guilty they will bring such things the SDNY won't, for example, not bring further charges but I think it's interesting that only the SDNY or the tax division agreed not to bring further charges. It does not include, for example, the DOJ or the special counsel here.

POLISI: Right. And that's sort of the leverage that they have in their tool kit.

HARLOW: Right. POLISI: Typically, I mean, the commentary is correct that typically

the usual course in terms of procedurally you would enter the cooperation agreement concurrently with the plea deal.

[09:10:09] However, that by no means means that a cooperation agreement is excluded at this point. This is a highly unique case, Poppy, so, you know, some of you have gone so far to think that potentially there's a cooperation agreement under seal. I don't tend to agree with that but certainly there could be cooperation down the road.

(CROSSTALK)

CALLAN: Yes, I think --

HARLOW: Why wouldn't Michael Cohen -- I mean, if he's already pleaded guilty to all these counts, why wouldn't he cooperate to try to get a little bit less prison time?

CALLAN: I think he would be eager to cooperate and I also think that Cohen will supply ultimately a possible road to incriminate the president in a far more serious way than what we're talking about today.

HARLOW: Which is what -- can we just play, guys, Lanny Davis. Michael Cohen's lawyer? He said as much. Let's listen to him.

(BEGIN VIDEO CLIP)

DAVIS: But I do -- to answer your question -- know that Michael Cohen has information that would be of interest to Mr. Mueller in his probe of a conspiracy to corrupt American democracy very similar to the indictment of the 12 Russians. I believe that Mr. Cohen would be able to provide information useful to the special counsel. I won't call it smoking gun information, somebody else will have to judge that.

(END VIDEO CLIP)

HARLOW: Don Lemon then asked him, are you talking about the Trump Tower meeting with the Russians and he said no, it's something else.

CALLAN: Yes. Well, this may be something entirely off the radar that people don't know about, Lanny Davis does obviously, but I've always thought that Cohen is the Achilles heel of Donald Trump because for so long he was the guy who for the Trump Organization solved the difficult problems in whatever way he had to and in that business world my suspicion is that if you push on Cohen, you're going to find that Donald Trump may have been involved in business transactions or family members of the Trumps were involved in business transactions that will create liability and exposure for them. And I think that's probably a greater problem for Mr. Trump than this case.

HARLOW: Quickly, I would say that perhaps the only reason Cohen may not cooperate would be if he thinks he would some way get a pardon from the president. Clearly the president doesn't like him very much.

POLISI: Right. And Lanny Davis, you know, says he's not looking for a pardon.

HARLOW: Right. But let's not forget that it was just a few months ago that the president pardoned Dinesh D'Souza.

POLISI: Yes.

HARLOW: For campaign finance violations.

(LAUGHTER)

POLISI: And the interesting thing about the pardon for Dinesh D'Souza was that his defense wasn't that he didn't commit those crimes, it was that it was a selective prosecution, a vindictive prosecution.

HARLOW: Right.

POLISI: That was a clear signal. You know, I think one of the things that people aren't considering is the fact that maybe the Southern District prosecutors don't want or need Michael Cohen's cooperation. They may not think he's a credible enough witness. So that's an option.

HARLOW: Sure. And that credibility is so important, right?

POLISI: Yes.

HARLOW: Thank you both. Nice to have you.

Ex-Trump campaign chairman Paul Manafort also found guilty on eight charges. A win for the Mueller team? What does it mean moving forward? Next, a former Watergate prosecutor who is texting with Rudy Giuliani, the president's lawyer, yesterday in all this chaos, will join me. What he heard from the president's lawyer.

Also, he's a founding member of the, quote, "Trump caucus." One of the president's first supporters in Congress. Well, now Republican Congressman Duncan Hunter and his wife have been indicted, accused of using campaign funds to pay for a lavish lifestyle.

And in Iowa, a small town this morning is grieving a great loss as an autopsy is set for the body believed to be the missing Iowa college student Molly Tibbetts. An undocumented immigrant charged with her murder.

(COMMERCIAL BREAK)

[09:15:00] HARLOW: It is a major victory for special counsel Mueller. President Trump's former campaign Chairman Paul Manafort who ran the president's campaign for five critical months now convicted on eight counts, facing 80 years in prison.

The president still, though, after that guilty verdict came down calling him a good man, this after he was convicted on eight different counts of financial crimes, and it's not over yet.

Another big trial looms ahead of him in just a few weeks. Jessica Schneider is in Washington and joins me now. What a day by the way, watching you live, Jess, as all of this news was coming out of the court yesterday afternoon, it was quite a day. What can you tell us?

JESSICA SCHNEIDER, CNN JUSTICE CORRESPONDENT: It was a whirlwind day, Poppy. Every little --

HARLOW: Yes --

SCHNEIDER: Minute, there was something happening. But you know, you talked about the president, he talked about Paul Manafort and when he did it, he also referenced Paul Manafort's previous political work for other presidents including Ronald Reagan.

Interestingly, that's something that Manafort's defense team did in closing arguments, and obviously, that was a tactic that didn't work out so well given the conviction on those eight counts.

Now, when the president spoke about this as well, he also tried to distance himself from Paul Manafort despite the fact that Manafort was his campaign chairman. Take a listen.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Paul Manafort is a good man, he was with Ronald Reagan, he was with a lot of different people over the years and I feel very sad about that.

It doesn't involve me, but I still feel that, you know, it's a very sad thing that happened. This started as Russian collusion, this has absolutely nothing to do. This is a witch-hunt and it's a disgrace.

(END VIDEO CLIP)

SCHNEIDER: So the president trying to stress there that Paul Manafort's conviction had nothing to do with him and, of course, the 12-member jury they did find Paul Manafort guilty on eight of the 18 charges.

They were all related to financial fraud. The judge though declared a mistrial on the remaining 10 counts because the jury just couldn't come to a unanimous agreement. So you see there what Manafort has been convicted of -- five counts of tax fraud, one count of hiding a foreign bank account, two counts of bank fraud.

So those last two counts of bank fraud, they carry up to 30 years in prison each, and now prosecutors will have to decide whether or not to bring a re-trail for those remaining 10 counts of bank fraud and failing to file reports for foreign bank accounts.

[09:20:00] What's different and why he wasn't convicted, perhaps, on all of those counts is because even though they were similar, they span different years and they involve different banks here.

So Poppy, prosecutors now have to decide by one week from today whether they'll bring a retrial for those other 10 counts, and then of course, don't forget, Paul Manafort is scheduled to go to trial in Washington D.C. on separate counts, that's happening at the end of September, so a lot are coming --

HARLOW: Yes --

SCHNEIDER: Poppy.

HARLOW: OK, Jessica, you'll be on it for us for sure, thank you very much. With me now is Jon Sale; he's a criminal defense lawyer, specializing in white color cases. He's also a former assistant special prosecutor in the Watergate case and a close friend and former law school classmate of the president's personal attorney Rudy Giuliani. Nice to have you.

JON SALE, CRIMINAL DEFENSE LAWYER: Thanks, Poppy, nice to be with you.

HARLOW: I know you were texting with Giuliani yesterday, he's on vacation?

SALE: He's on vacation. I wish I could make some breaking news and headlines, but the text was "how are you enjoying your vacation?" and his answer was, "I am or it's great" --

HARLOW: Yes, there you go --

SALE: So --

HARLOW: He's enjoying his vacation --

SALE: No headlines -- no headlines out of that.

HARLOW: Or made a very difficult news cycle for him and the president. All right, so let me get you on Manafort first, OK? Because you heard what the president said about Manafort, he's a good guy, this has nothing to do with me, this has nothing to do with Russia, this has nothing to do with my campaign.

Here's the thing, though. When you read the dates on the counts that he was convicted guilty of, counts 25 and 27 are about fraudulent issues with banks, bank loans and they extend into March of 2016, that's when he started with the Trump campaign. Problematic, significant?

SALE: Well, I think they're still personal financial issues of Mr. Manafort. The real issue for Manafort is everyone is saying they don't know why he didn't make a deal earlier, now it's inevitable he's going to make a deal.

I mean, the problem with that is nobody knows what if he's inclined what he would say, and everybody is assuming he's in the position to hurt the president if he wants to testify against the president.

Or maybe he is, but maybe he isn't because we have no indication of what he would say if he wanted to make a deal. But he's in a difficult situation. I'm in Miami and I woke up this morning to see the "Miami Herald", the headline said "President suffers one-two punch". My reaction to that was it's a catchy headline, but I -- what came to

my mind was Rocky Balboa who suffered more than one-two punches and he got up and he remained standing. So we really don't know.

HARLOW: All right, so stick with me for this. All right, we just heard from the president on both Manafort and Cohen one moment ago, so let me read it to you here. "I feel --

SALE: OK --

HARLOW: Very badly for Paul Manafort and his wonderful family", the president writes. "Justice -- in quotes -- took a 12-year-old tax case among other things, applied tremendous pressure on him, unlike Michael Cohen, he -- being Manafort refused to, quote, "break", make up stories in order to get a deal. Such respect for a brave man."

OK, you say -- you just told me you think it is "inevitable" that Manafort flips -- that Manafort now makes a deal with Mueller's team. And now, we hear the president praising him, calling him a brave man. What do you make of this, the president and the White House strategy on this?

SALE: Yes, I'm sorry, if I said that -- I don't -- I didn't think it's inevitable. I said some people think it's inevitable.

HARLOW: Oh, OK --

SALE: I don't --

HARLOW: OK --

SALE: I do not, I do not because we don't know what he would say, and the lead into this piece, you know, the reporter I think said that he's facing 30 years in prison. That's not realistic because under the sentencing guidelines, he's facing much less.

But he's facing -- he's 69 years old, so he's facing a lot of time, so there's a lot of pressure on him to so-called flip, but we don't know if he would, if he wants to or if he's inclined to or if he's in a position to.

I mean, we don't know what he would say. But of course, there is pardon out there when -- with the president's words like that, that he feels sorry for him, he's a good man.

I don't know if there's going to be a pardon or not, but that's something that obviously the Manafort team has to be thinking about. But he's not --

HARLOW: Have you -- I mean, you --

SALE: Going into a much more difficult trial in Washington --

HARLOW: You are -- you are in your own words very good friends with Rudy Giuliani, close to him. What's your read on a potential pardon for Manafort? SALE: Well, I don't talk to Rudy about anything involving what might

be privileged information. So I have -- nor certainly to the president. So I don't know. I just think that --

HARLOW: OK --

SALE: What -- as a citizen, when the president is saying, "good man, I feel sorry for him", loyal, those are pardon-type words. I don't know if he's going to pardon him or not, and I don't know if it's appropriate or not.

09:25:00] HARLOW: But pardon-type words in your words. Let me ask you finally about Michael Cohen. The fact that --

SALE: Right --

HARLOW: He said in court under oath yesterday that the president of the United States ordered him in coordination with and at the direction of the president of the United States to pay off a porn star and a former "Playboy" playmate to mislead the American people in the days before the election. How much of a world of hurt do you think that that puts the president in?

SALE: Well, two things. First of all, that, if true, is a crime. It's a crime. It would -- could find its way into Mr. Mueller's report and be characterized as a crime. It's also potentially a, quote "high crime and misdemeanor for the Congress".

However, everybody really is overlooking, it may be true, it may not be true, but by Mr. Cohen saying it, it's an accusation on the part of Mr. Cohen. It is not necessarily true. May -- I'm not saying it's false, it may --

HARLOW: Right --

SALE: It may be true, but it's just a charge. It's just an accusation, but I want to say one thing if I may.

HARLOW: Please.

SALE: It may -- he did -- it's unusual that he does not have a cooperation deal, and it may very well be that neither the special prosecutor nor the southern district of New York needs him. And I was very surprised that Lanny Davis is going all over television, saying that he has information of interest to Mr. Mueller.

The reason I'm surprised at that is, if it were me representing Mr. Cohen, I would not be peddling that type of information, trying to get Mr. Mueller's attention. The only person we don't see on television is Mr. Mueller, and I am certain that if he's interested in Mr. Cohen's testimony, they will obtain it in the proper way.

But it's not going to be in my opinion, from one of his lawyers trying to sell it on television. That suggests to me they don't need it.

HARLOW: Well, and that could be read as being very concerning to the White House, right?

SALE: Absolutely.

HARLOW: OK, Jon Sale, important information, thank you for joining me this morning.

SALE: Thank you so much for having me.

HARLOW: OK, $14,000 vacations, $11,000 runs to Costco. Here's the problem, a Republican Congressman and his wife allegedly used campaign money to pay for all of it. Details about their indictment ahead.

(COMMERCIAL BREAK)